Dongxing Securities lists the top ten net purchases and net sales of southbound funds for Hong Kong stocks last week (table)

Dongxing Securities published a report stating that last week (January 5 to 9), the Hang Seng Tech Index fell by 0.9%, the Hang Seng Index dropped by 0.4%, and the Hang Seng China Enterprises Index decreased by 1.3%. By industry, healthcare (10.1%) and materials (4.7%) led the gains; telecommunications (-2.3%) and information technology (-1.6%) led the declines.

The net inflow of Hong Kong Stock Connect was HKD 32.65 billion, but its share of the total turnover of Hong Kong stocks decreased from 51% to 45%. Net inflows were seen in the financial sector, consumer discretionary, and information technology; net outflows were in telecommunications, industrials, and conglomerates.

Last week, the net inflow of ETFs (Hong Kong Stock Connect + QDII) directed towards the Hong Kong market accelerated. The total scale expanded to HKD 389.488 billion, an increase of HKD 13.881 billion. Among them, the net inflow of Hong Kong Stock Connect ETFs was HKD 10.8 billion, and the net inflow of QDII ETFs was HKD 720 million. The net outflow from broad-based Hong Kong stocks was HKD 229 million. The net inflow sectors included TMT, dividends and state-owned enterprises, and technology manufacturing.

From an economic fundamentals perspective, there is not much time left for the Federal Reserve to cut interest rates this year, and the pulse effect of fiscal expansion on the economy is still on the way. If the Federal Reserve does not cut rates in the first quarter of this year, the rebound pace of Hong Kong stocks will depend more on the microeconomic situation. Excluding exchange rate impacts, corporate fundamentals still need more good news. The bank believes that the overall allocation of Hong Kong stocks should maintain a barbell strategy, suggesting controlling allocation positions and waiting for more news to be released. Value dividends serve as the base, while the offensive direction continues to focus on market consensus, AI technology, non-ferrous metals, and innovative pharmaceuticals. Attention should also be paid to whether there will be new catalysts from this week's JPM Healthcare Conference regarding innovative pharmaceuticals.

The bank listed the top ten net purchases and net sales of Hong Kong stocks by southbound funds last week:

1. Top ten net purchases by southbound funds

Stock│Net inflow amount

Xiaomi Corporation-W (01810.HK)│HKD 3.148 billion

Ping An Insurance (02318.HK)│HKD 2.881 billion

Alibaba-W (09998.HK)│HKD 2.016 billion

Kuaishou-W (01024.HK)│HKD 1.686 billion

China Life (02628.HK)│HKD 1.629 billion

CSPC Pharmaceutical (01093.HK)│HKD 1.118 billion

China Pacific Insurance (02601.HK)│HKD 762 million

Meituan-W (03690.HK)│HKD 675 million

Sangfor Technologies (01530.HK)│HKD 610 million

BYD (01211.HK)│HKD 566 million

1. Top ten net sales by southbound funds

Stock│Net outflow amount

China Mobile (00941.HK)│-HKD 2.402 billion

SMIC (00981.HK)│-HKD 696 million

China Hongqiao (01378.HK)│-HKD 566 million

China Galaxy (06881.HK)│-HKD 474 million

GCL-Poly Energy (03800.HK)│-HKD 439 million Agricultural Bank of China (01288.HK)│-424 million

China Merchants Bank (03968.HK)│-406 million

People's Insurance Group (01339.HK)│-403 million

China Cosco Shipping Energy (01138.HK)│-400 million

Yangtze Optical Fibre and Cable (06869.HK)│-320 million

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Note: The Hong Kong Stock Connect industry data is not published by the exchange and is estimated by Soochow Securities based on changes in shareholding and the average transaction price of individual stocks